Worldwide, energy generation is moving towards replacing fossil fuels with environmentally sustainable technologies, such as wind and solar power. South Africa is no exception.
South Africa has traditionally relied on low-grade coal as a source of fuel for electricity generation and on oil-based and coal-to-fuel petrol and diesel for transport. Hence the country has a backlog of clean energy technology to catch up on. Renewable energy projects are expected to take an increasing share of the energy mix in future.
To meet government’s international low-carbon commitments, South Africa is adopting clean energy production to move away from fossil fuels. Local content requirements mean that investment will be needed in a range of technologies and components for the wind and solar sectors. New opportunities also exist in biomass energy, biogas and solar thermal heating technologies.
The market for rooftop solar for corporate, industrial and residential use countrywide is estimated at 500MWp installed capacity. An estimated 100 000 public buildings also need to be retrofitted for energy efficiency. This provides an opportunity for the local manufacture and assembly of solar Components – and provides opportunity for investment.
Opportunities exist too in investment in other clean energy solutions such as biogas and landfill gas as a replacement for Liquid Petroleum Gas and biomass fuel. Apart from solar water heating for residential and commercial use, industrial-scale solar thermal power is a market worth more than R100-million, and with an estimated potential of R 3.7 billion for use in agri-processing, according to GreenCape.
The biggest opportunity is however provided by the utility-scale demand for solar and wind power to be supplied to the country’s national electricity grid for redistribution to consumers. Already around US$20 billion has been invested in this sector since 2011.
The Renewable Energy Independent Power Producer Procurement Programme, designed to encourage private investment in South Africa’s renewable energy, has achieved remarkable success. It is into its sixth year and has procured more than 6 300 MWp of renewable energy generation capacity. It has also attracted billions of rand in foreign investment.
The programme has now received the go-ahead to procure a further 6 300 MWp of generation capacity. The local content requirements are a particular call for investment